Disney will layoff 7,000 employees

Disney will layoff 7,000 employees, which translates into 3.6% of its total workforce worldwide. This decision is part of its cost-cutting plan that will also affect its content divisions.

This was announced by Bob Iger, the company's chief executive, in a call with analysts to comment on the results of the first quarter of its fiscal year, in which it earned 1,279 million dollars (1,196.2 million euros), a 16% year-on-year increase. 

According to Bloomberg, the company's chief executive also said the restructuring would save $5.5 billion (5.1 billion euros) in costs.

Bob Iger's plan is to reorganize the company into three segments dealing with broader areas of products and services. 

The media and  entertainment giant would now be made up of three divisions:

• Disney Entertainment, which includes most of its streaming and media operations

• An ESPN division that includes the TV network and the ESPN+ streaming service

• A Parks, Experiences, and Products unit, which will include cruise ships and merchandise shops

The move marks the most significant action Bob Iger has taken since returning to the company as CEO in November. Disney announced the changes minutes after it posted its most recent quarterly earnings. The announcements also come as Disney engages in a proxy fight with activist investor Nelson Peltz and his firm Trian Management.

“We are pleased that Disney is listening,” a Trian spokesperson said Wednesday.

Iger said the changes are aimed at improving profit margins and are part of the transformation the company has embraced in recent years, including a strengthening of its franchises and the development of its online content platform.

Disney+ in red numbers 

In the presentation of its quarterly results, the company reported a loss of 2.4 million subscribers to its Disney+ streaming service. It indicated it was making a loss, although it did not quantify it. Thus, within this sector, streaming content earned 5.3 billion dollars (4.94 billion euros) but had operating losses of 1.1 billion dollars (1.025 billion euros) due, above all, to the losses of Disney+.

The technology sector is in the midst of a wave of layoffs, and more and more companies are announcing job cuts. 

Amazon alone (18,000 redundancies), Microsoft (10,000), and Alphabet, Google's parent company (12,000), have made 40,000 employees redundant so far this year. Facebook's parent company Meta also announced 11,000 redundancies in November last year, affecting 13% of its workforce.